Bona Fide Error

Definition of 'Bona Fide Error'


An error that was unintentional; an "honest error." If a bona fide error is corrected immediately, then a defendant may not be liable for an action.

For example, under the Truth in Lending Act, a creditor can avoid liability by demonstrating that a violation was unintentional and was caused by a bona fide error, including clerical, calculation, computer malfunction or printing error. An error in legal judgment, however, is not ordinarily considered a bona fide error.

Investopedia explains 'Bona Fide Error'


Bona fide is a Latin phrase that means "in good faith," and thus sincere or honest. It can also mean authentic or genuine; a bona fide Van Gogh is a painting by Van Gogh. The various uses of bona fide reflect these meanings. For example, a bona fide resident is someone who resides, continuously and without interruption, for a certain minimum period of time.


Filed Under:

Related Video for 'Bona Fide Error'

comments powered by Disqus
Hot Definitions
  1. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
  2. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
  3. Jeff Bezos

    Self-made billionaire Jeff Bezos is famous for founding online retail giant Amazon.com.
  4. Re-fracking

    Re-fracking is the practice of returning to older wells that had been fracked in the recent past to capitalize on newer, more effective extraction technology. Re-fracking can be effective on especially tight oil deposits – where the shale products low yields – to extend their productivity.
  5. TIMP (acronym)

    'TIMP' is an acronym that stands for 'Turkey, Indonesia, Mexico and Philippines.' Similar to BRIC (Brazil, Russia, India and China), the acronym was coined by and investor/economist to group fast-growing emerging market economies in similar states of economic development.
  6. Pension Risk Transfer

    When a defined benefit pension provider offloads some or all of the plan’s risk – e.g.: retirement payment liabilities to former employee beneficiaries. The plan sponsor can do this by offering vested plan participants a lump-sum payment to voluntarily leave the plan, or by negotiating with an insurance company to take on the responsibility for paying benefits.
Trading Center